BTC isn't an asset, so trying to value it based on previous asset prices seems wrong.
That said, I all also keep predicting a major fall, but with institutional money looking forward to the CME futures launch, I on the verge of buying in. (Market are excellent at making the largest number of people incorrect, so that probably means we really are on the verge of a crash.)
Strictly speaking, stocks are a piece of paper. What makes the stock market behave as it does is the way people treat the stock. Similarly, the way people treat Bitcoin is as an asset with very, very high liquidity.
Sure it is. But that's not what makes this analysis a bit silly.
The problem is he's comparing Bitcoin to shares on regulated exchanges. And it's not subject to the same constraints as shares on regulated exchanges so it doesn't follow that it will have the dynamics of said shares.
He ever points out that it's already priced way beyond what you'd reasonably expect if it was a regulated share.
So sure it's likely to fall at some point and maybe it'll crash. But until it's controlled like a regulated asset it's just odd to assume it'll behave like one.
You point out the key factor now: channels are opening for institutional flows to force their way into crypto currency now. Most ‘casuals’ have no sense for the scale of buying that investor flows create. They are hugely impactful on markets as sophisticated and deep as commodities. In comparison, crypto currencies are a flyspeck.
I’m not saying it’s not a bubble because institutional money wants to buy it. But I am saying that having any view on how expensive bitcoin can become based on what it’s done during the time it was mostly enthusiast and ‘the fringe’ were the main buyers is naive.
My view is that the largest impediment to institutional money is the horrific custodianship issues of bitcoin. State Actors and Super-Criminals are attacking this constantly to steal your money. That risk is minuscule in regular financial markets (because banking system has lots of protections against it).
While I'm personally certain BTC will crash eventually, I also dislike technical analysis (which this article is full of).
I do realize that technical analysis is just psychology applied on a statistical / price level, but I still fundamentally distrust the methodology for some reason.
Still, props to Bloomberg for referencing studies (even if I don't like how those studies are done). Maybe if these "indicators" are right, they'll eventually convince me to start using technical analysis myself...
I completely agree. I think financial analysts have a way of presenting their astrology-like technical analysis in a way that seems solid and professional. But when you look at the technical analysis of the Altcoin world, which uses the same pseudo-mathematics (for lack of a better term), you really feel how much of a crapshoot it is. One example is a page I saw yesterday (I wish I could find it now) which showed the myriad ways in which Ethereum was going to, as they say, 'break out' of the 'range.' There were about 6 or 7 graphs with fancy mathematical wording that proved it, with a sort of red marker overlay on top of a line graph. The red marker overlay has upside-down triangle shapes, squigglies, and various other markings that prove the math. It's presented in a shortened, quick way.
As a result of Altcoin analysis, I've become even more skeptical of stock analysis.
Disclaimer, I inves^H^H^H^H^H gamble 5 digits in both types and half-heartedly follow stock news (and now Xcoin news).
It's a psychological game with vaguely real underpinnings, all this stuff.
Sure, Bitcoin is a bubble, many altcoins are a scam and many people are going to lose their shirts. But let's not pretend that stock market trading is that much better. For the skeptical, I beseech you to look at Seeking Alpha stock commentaries and analyses.
> Sure, Bitcoin is a bubble, many altcoins are a scam and many people are going to lose their shirts. But let's not pretend that stock market trading is that much better. For the skeptical, I beseech you to look at Seeking Alpha stock commentaries and analyses.
The difference between BTC and Stocks is rather fundamental.
Stocks entitle me to a portion of the profits (aka: the Dividend) and a company vote each year. Believe it or not, directly controlling a company and grabbing a portion of the profits of said company has real value.
Anyone that claims something will crash should put their money where their mouth is and short it.
If someone comes out telling me something will crash but they don't show me they're shorting it, that makes it suspect. My next immediate question is: what's your gain in convincing people that something will crash?
See: Jamie Dimon talking smack while JP Morgan invests in crypto.
Shorting bitcoin would be borrowing them say at $5000 price, selling on the market on $5000 immediately, and then when it fall to say $2000, you buy it again, return to owner, and have extra $3000 in your pocket, so you got $3000 from your trade.
Just selling bitcoins now and sitting on the cash will not produce any income.
Maybe someone has access to the study this is based on and can clarify something: "The researchers defined a bubble as a sharp price run-up over a two-year followed by at least a 40% drop over the subsequent two years."
OK, so the claim is that Bitcoin is likely to drop 40% sometime within the next two years. My question is, what is the 40% relative to? Is it relative to the peak maximum? That is, assuming we are at the maximum right now, would the 40% be a drop to $6000?
I'm asking this carefully because "Bitcoin will drop to $6000" isn't exactly scary to anyone who bought Bitcoin more than a month ago. On the other hand, if the 40% is relative to some presumed stable plateau before the price run-up, i.e., to a Bitcoin price of $1000 or less, that would be enormous.
EDIT: Just to clarify, I understand that "at least 40%" can be considerably more than 40%.
TL;DR - just dump it on the bankers. Once they're into anything, it gets a bubble. Thats how bitcoin jumped so high in 2017. Get out before the last bank buys in. We can reevaluate whats left after they crash it with their money equivalent to the bandwidth in Reddit's hug of death.
When is the last time anybody here used bitcoin as a currency?
Bitcoin is those bankers' latest toy. Bankers and their money will hug Bitcoin to death like Redditors to a cute cat gif hosted on a Pentium3 machine.
We already see it - how long is the backlog of transactions that bitcoin rolls over to the next 10min resolution? When I checked, it was nearly 2x as long as the miners can resolve in 10 minutes. Or worse, apparently: https://blockchain.info/charts/avg-confirmation-time
Fucking traders, clogging our currency too much for us to use it, just so they can buy in on the thing that just goes up. It isnt usable anymore for exchange.
They're using the collective wealth of the world (banks, being money safehouses, depositories, etc collectively have magnitudes more money than what circulates in the commercial economy) to try to join in on a craze they usually dont understand. They might just see users paying transaction fees directly, and grow a chub.
Consequently, those bankers are now the reason it "just goes up" this sharply. When we run out of banker patsies to join in on the ostensible money-orgy, look for it to drop. The best/luckiest run at the peak. And then it drops. Panick ensues among the bankers... and the party turns to massacre.
Intentional or otherwise, this hype-train turns functionally into the classic pump and dump scheme that youve see spammers do with penny stocks.
If it recovers through the "moral"/financial defeat of such a crash by continue operating anyway, only after the rebound can we evaluate the value of bitcoin.
In the meantime? Screw those bankers - sell them your bitcoin until we can have our monetary platform back. Or we could try a different one. I hear Etherium is nice, and has less brand recognition among bankers.
The key is 2 sentences:
- researchers devised a “rule” by observing stock market, likely empirical
- someone was stupid enough to apply it to crypto (a different market)
First thing a good university will tell a student is the boundaries of applicability of a law or formula.
Newtonian laws work fine except when speeds get close to that of light, for instance (simplified).
22 comments
[ 2.6 ms ] story [ 47.9 ms ] threadThat said, I all also keep predicting a major fall, but with institutional money looking forward to the CME futures launch, I on the verge of buying in. (Market are excellent at making the largest number of people incorrect, so that probably means we really are on the verge of a crash.)
Sure it is. But that's not what makes this analysis a bit silly.
The problem is he's comparing Bitcoin to shares on regulated exchanges. And it's not subject to the same constraints as shares on regulated exchanges so it doesn't follow that it will have the dynamics of said shares.
He ever points out that it's already priced way beyond what you'd reasonably expect if it was a regulated share.
So sure it's likely to fall at some point and maybe it'll crash. But until it's controlled like a regulated asset it's just odd to assume it'll behave like one.
I’m not saying it’s not a bubble because institutional money wants to buy it. But I am saying that having any view on how expensive bitcoin can become based on what it’s done during the time it was mostly enthusiast and ‘the fringe’ were the main buyers is naive.
My view is that the largest impediment to institutional money is the horrific custodianship issues of bitcoin. State Actors and Super-Criminals are attacking this constantly to steal your money. That risk is minuscule in regular financial markets (because banking system has lots of protections against it).
I do realize that technical analysis is just psychology applied on a statistical / price level, but I still fundamentally distrust the methodology for some reason.
Still, props to Bloomberg for referencing studies (even if I don't like how those studies are done). Maybe if these "indicators" are right, they'll eventually convince me to start using technical analysis myself...
As a result of Altcoin analysis, I've become even more skeptical of stock analysis.
Disclaimer, I inves^H^H^H^H^H gamble 5 digits in both types and half-heartedly follow stock news (and now Xcoin news).
It's a psychological game with vaguely real underpinnings, all this stuff.
Sure, Bitcoin is a bubble, many altcoins are a scam and many people are going to lose their shirts. But let's not pretend that stock market trading is that much better. For the skeptical, I beseech you to look at Seeking Alpha stock commentaries and analyses.
The difference between BTC and Stocks is rather fundamental.
Stocks entitle me to a portion of the profits (aka: the Dividend) and a company vote each year. Believe it or not, directly controlling a company and grabbing a portion of the profits of said company has real value.
If someone comes out telling me something will crash but they don't show me they're shorting it, that makes it suspect. My next immediate question is: what's your gain in convincing people that something will crash?
See: Jamie Dimon talking smack while JP Morgan invests in crypto.
Just selling bitcoins now and sitting on the cash will not produce any income.
You can still go short on BTC: just sell now and buy when it goes down, if you're sure it will.
I understand it is a different mechanic. In your example, if BTC went to 10k you'd still have to return that 1 BTC to the person you borrowed it from.
OK, so the claim is that Bitcoin is likely to drop 40% sometime within the next two years. My question is, what is the 40% relative to? Is it relative to the peak maximum? That is, assuming we are at the maximum right now, would the 40% be a drop to $6000?
I'm asking this carefully because "Bitcoin will drop to $6000" isn't exactly scary to anyone who bought Bitcoin more than a month ago. On the other hand, if the 40% is relative to some presumed stable plateau before the price run-up, i.e., to a Bitcoin price of $1000 or less, that would be enormous.
EDIT: Just to clarify, I understand that "at least 40%" can be considerably more than 40%.
When is the last time anybody here used bitcoin as a currency?
Bitcoin is those bankers' latest toy. Bankers and their money will hug Bitcoin to death like Redditors to a cute cat gif hosted on a Pentium3 machine.
We already see it - how long is the backlog of transactions that bitcoin rolls over to the next 10min resolution? When I checked, it was nearly 2x as long as the miners can resolve in 10 minutes. Or worse, apparently: https://blockchain.info/charts/avg-confirmation-time
Fucking traders, clogging our currency too much for us to use it, just so they can buy in on the thing that just goes up. It isnt usable anymore for exchange.
They're using the collective wealth of the world (banks, being money safehouses, depositories, etc collectively have magnitudes more money than what circulates in the commercial economy) to try to join in on a craze they usually dont understand. They might just see users paying transaction fees directly, and grow a chub.
When you understand that those investment bankers manage commodities and their futures, derivatives, bonds, real estate, and the stock market? http://money.visualcapitalist.com/worlds-money-markets-one-v... you understand that currency is only a tiny portion of the money in the world, and these idiots manage all of the rest of it as investments. And they're getting stupid about joining in on bitcoin. https://www.bloomberg.com/news/articles/2017-10-05/bitcoin-s...
https://cointelegraph.com/tags/jamie-dimon
Consequently, those bankers are now the reason it "just goes up" this sharply. When we run out of banker patsies to join in on the ostensible money-orgy, look for it to drop. The best/luckiest run at the peak. And then it drops. Panick ensues among the bankers... and the party turns to massacre.
Intentional or otherwise, this hype-train turns functionally into the classic pump and dump scheme that youve see spammers do with penny stocks.
(Catch up: https://youtu.be/ytDamqTjPwg Or google 'spam pump and dump penny stocks' for some quick reads)
If it recovers through the "moral"/financial defeat of such a crash by continue operating anyway, only after the rebound can we evaluate the value of bitcoin.
In the meantime? Screw those bankers - sell them your bitcoin until we can have our monetary platform back. Or we could try a different one. I hear Etherium is nice, and has less brand recognition among bankers.
First thing a good university will tell a student is the boundaries of applicability of a law or formula.
Newtonian laws work fine except when speeds get close to that of light, for instance (simplified).
It’s even more obvious for empirical “laws”.